To encrypt your backups, enable the Encrypt compressed files option and click Set password to define a password.
SQLBackupAndFTP encrypts backup files during compression by setting a password for the backup archives. The compression utilities (zip/7zip) use the AES-256 encryption algorithm.
If the compression option is disabled but the encryption option is enabled, compression will still occur with the minimum compression ratio.
If your backup storage is compromised and an encrypted archive falls into the hands of a malicious actor, they would need to crack the password locally to access the data. Therefore, it is crucial that the password is complex and lengthy.